Update (07/01/2018): This strategy no longer works with Airbnb’s Smart Pricing because if you use it, you no longer have a ‘Base Price’ option, only a minimum and maximum.
Disclaimer (update 08/27/17): Some (very few) hosts believe this strategy is deceitful towards the guest. Here is my response: Then don’t use it. If I did not get criticism then I know my work would be mediocre so I am honestly glad to receive this feedback. To me, it’s like telling Usain Bolt that wearing specialized track shoes, though not against the rules, is deceitful to the fans as he is running faster than he would with regular track shoes on. Doesn’t quite make sense, does it? Anyways, on to the good stuff for those hosts to dare to continue 😀
There’s a little known Airbnb pricing hack amongst Airbnb pro’s to virtually guarantee more views and reservations. This pricing hack only works when you’re connected to either Smart Pricing (with one exception) or an intelligent pricing partner (I recommend PriceLabs, but Wheelhouse for US hosts and Beyond Pricing or for everyone else are two fine alternatives; see my article about Airbnb revenue management or my PriceLabs review and guide). As usual, let’s get right into it.
It all has to do with the base price in Airbnb and whether or not it’s being used in the calendar. Typically, when you connect your account to Smart Pricing or a third-party pricing partner, the base price is ignored in favor of the ‘smart’ daily pricing. If this is the case, the hack quite simply is to lower your base price 10% below your minimum.
When you’re connected to either Smart Pricing or a third-party pricing tool, your base price is only shown in search results to guests who have not inputted dates, which happens often. What you are doing is enticing these guests to click on your listing which shows an artificially lower price. Once they’re in, they’ll fall in love with your perfectly optimized listing (you’d, of course, already purchased your listing optimization) and create a reservation.
Let’s look at a real life example…
Take Kim and Rob’s listing who rank #1 in search results in San Francisco (yes, they’ve been optimized and I am their Airbnb property manager). Below is a screenshot of an example search of San Francisco without any dates entered, only city and number of guests. The future potential guest (FPG) would see a price of $155/night. This is slightly lower than their typical rate of $175/nt.
Since the listing ranks high, has a great cover photo, great reviews, a great title, and is cheaper than the competition, the guest would likely click to see more.
Now, the guest falls in love with the listing because the photos are captivating and the text is clear and concise. They enter their dates to see the pricing is actually $175/nt.
What’s an extra $20? They’ve already searched around and decided on your listing.
Alternatively, this host is doing it backward. An FPG searching without dates would see $155/nt when, in fact, their true price is much lower at $113/nt. This host should lower their base price to $105 or less.
You need to ensure that your base price is never being used in your calendar. If it is, someone could book (especially if you’re on Instant Book) at this bargain price. Here’s when you need to worry:
- Airbnb Smart Pricing – Only prices your calendar out a certain number of days (as of December 2016 it is 90 days) so if you allow reservations outside of this window, you cannot use this strategy. As a fix, you can tell Airbnb to only let guests book your place 3 months in advance. Find this in ‘Availability settings’”
- Third-party pricing partner – Some update your calendar 1 year in advance, which is ideal. Others only update for 90 days so you’d have to watch out here by adjusting your availability settings as mentioned above. This differs by market and by third-party pricing partner so you’ll have to check yourself.
This is a rather complex strategy due to the variables and having to use a pricing tool to accomplish it. However, it is worth its weight in gold due to the increased clicks you’ll get which has a positive effect on your search rank. If your listing is properly optimized, you’ll also receive more bookings.
Please comment below for any clarifications needed on this Airbnb pricing hack so we can help each other out.
Also published on Medium.